Saturday, September 30, 2017

What Lawyers Do, a Specialization Guide

          Two things struck me this week regarding my profession. First, my son is trying to decide what type of lawyer he wants to be when he graduates from law school next spring. Second, while binge watching Better Call Saul, I was struck by Saul’s attempt to label himself an Elder Law Attorney simply by drafting a few wills.  Putting aside that a lawyer who drafts wills is considered a Trust and Estates attorney, not an Elder Law attorney, I began to think about all the areas of practice in which we, as lawyers, specialize which, in many ways, are unknown to the public who think lawyers, know or should know, all areas of the law.

          There are two main branches of practice, commonly divided between trial attorneys and transactional attorneys. Historically, and in actual practice in some countries, the trial attorneys were known as barristers. These attorneys present all cases in court at the direction of solicitors who handle the actual day-to-day practice of law and who handle all client relations. In many cases, the barrister receives the trial materials merely a day or two before the trial, presenting the case prepared by the solicitor. Barristers were forbidden to meet with clients or to even form partnerships with other barristers. However, many barristers banded together in groups called chambers in which they could share resources, office space and clerks.

          In the United Kingdom for example, barristers are still the most common trial attorneys though the fusion of practice between barristers and certain solicitors is continuing to expand in the United Kingdom. Barristers still wear horsehair wigs, stiff collars, bands, and a gown when appearing in court in the United Kingdom. 

          In the United States, the separation of barristers and solicitors has been eliminated and anyone who is licensed as an attorney may appear in any state court in which they are licensed. However, appearances in federal court still require an application, and in some cases also require the taking of a test. In many jurisdictions, including federal, admission to the appellate bar also requires an application and in some cases an examination. Admissions to the Federal Bankruptcy Bar requires both admission to the federal District Court for the applicable bankruptcy court, and passage of an examination and a minimum of continuing legal education credits. Admission to the United States Patent and Trademark bar requires passage of a very difficult exam and a scientific or engineering undergraduate degree.

          Most lawyers today have a jurist doctorate degree issued by one of the United States’ one-hundred fifty plus accredited law schools. Many law schools also now offer certificates to their students, which allows a student to “major” in a specific area of law while in law school. These programs require the students to take a specific coursework in their “major,” and also to take one or two additional classes beyond the normal number required to graduate. Some programs also require maintaining a minimum GPA in the specialized area. Upon graduation, the student receives a separate certificate indicating the completion of the specialized coursework program.

          In addition, there is also post-law school graduate work for further specialization. The most common is the Masters in Law in Tax, commonly known as the LLM degree. Many tax attorneys practicing today hold this graduate degree.   Other LLM’s are available today including LLMs in international, real estate, health or environmental law.

          On television, lawyers appear to handle a variety of legal matters including criminal and civil, transactional and litigation. While there still are some lawyers who handle a wide variety of cases, most lawyers specialize in a limited area of law. In litigation, there are lawyers who specialize in criminal cases, family law cases, commercial litigation, or civil litigation. Transactional lawyers also specialize, including areas such as real estate, corporate, intellectual property, licensing, sports law and other areas.

          In Florida, lawyers who specialize in a specific area may, after practicing five years, stand for one of the many certification exams offered by the Florida Bar. These exams, when passed, allow a lawyer to state that they are Board Certified in that specific area.   There are currently twenty-six areas of law for which lawyers may become Board Certified. This list continues to grow and includes both litigation and transactional areas of law. 

          Armed with this knowledge, it makes it easier for you to properly select a lawyer to represent you in whatever matter your legal needs require. Choosing the correct lawyer is the first step to resolving your legal needs, and selecting someone who is not qualified to handle your case can lead to poor representation and an unhappy outcome.


Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm with offices in Palm Beach County and a Board Certified Real Estate Attorney who handles a variety of real estate matters throughout South Florida.  He can be reached at 561.594.1452, or at mjposner@warddamon.com

Saturday, March 11, 2017

President Trump and Real Estate

   Many people believe that Trump will be good for business and real estate, due to his career which was heavily involved in commercial and real estate.  This is yet to be seen, but right out of the gate Trump had an effect on the real estate market by his issuance of his first Executive Order on inauguration day.

          The issue in question was the action by President Obama, in the waning days of his administration, to reduce the premium for mortgage insurance on mortgages guaranteed by the Federal Housing Administration (FHA).  These loans are usually financed with only three to five percent down, and as such, require mortgage insurance to cover the possibility of a deficiency upon default due to the limited amount of equity in the property.

          The mortgage insurance premium is a monthly fee tied to the loan size, loan term and includes an upfront premium of 1.75% of the loan amount and between 45 and 105 basis points (0.45% to 1.05%) annually on the loan balance, paid in monthly installments with the principal and interest payments.

          Earlier in January, 2017, President Obama directed a 25-basis point (0.25%) cut in the premium which was estimated to save consumers, on average, at least $25.00 per month.  This decision was based, in part, on the belief that the funds that insure these mortgages have sufficient reserves to allow for a premium reduction. However, only four years ago, taxpayers funded a 1.7-billion-dollar bailout of the FHA to fund shortfalls in the insurance fund due to a large number of loan defaults.

          In response to the action by the outgoing President, Trump issued an Executive Order cancelling the reduction.  This action was taken, in part, as a reaction to the Obama administration adopting new policies as it prepared to leave office, but was also taken due to the concern that a premium reduction puts taxpayers at risk due to decrease in the insurance funds available to the FHA to cover defaults.

          Another issue on President Trumps agenda is reducing or eliminating the mortgage interest deduction. Currently married homeowners who itemize their taxes can deduct interest on mortgages of up to one million dollars ($500,000 for single persons).  The deduction is supported by Realtors, home builders and bankers who use it as a selling point to potential home buyers.

          However, the number of home owners who itemize is not as popular as some believe.  At least a third of homeowners have no mortgage, and many lower and middle income homeowners do not itemize their taxes, losing any potential deduction from the interest that they pay on their mortgage.   The Tax Policy Center states that the mortgage interest deduction mostly benefits wealthier Americans.  “Instead of turning renters into homeowners, homeownership tax expenditures encourage middle- and upper-income individuals to purchase more expensive homes, take on more debt, or buy second homes.”

          Trump’s plan is to cap total available deductions at $100,000.  This cap will only affect the wealthiest, since even on a $500,000-dollar loan at five percent, the total interest deduction in year one of the loan would be $25,000.  However, when you consider other deductions that come into play such as property taxes, charity, medical expenses and the like, the cap will affect some homeowners, especially wealthier homeowners who now have deductions that far exceed $100,000.

          The National Association of Realtors will strongly oppose any measure to reduce the mortgage interest rate deduction, as they believe that this will impact home ownership.  With ownership levels continuing to fall, the President of NAR has said that NAR is “adamant about protecting tax deductions for residential mortgage interest and property taxes—for primary and secondary homes.”


          Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.  They can be reached at 561.594.1452, or at mjposner@warddamon.com

Binding Arbitration (The Wells Fargo Dilemma)

     Wells Fargo Bank was recently caught opening thousands of unwanted accounts, resulting in millions of fees charged to unsuspecting customers.  After an investigation, Wells admitted its failures and has promised to make things right by its customers.  Since then a number of class action lawsuits have been filed, and Wells has, to-date, successfully stopped the lawsuits, invoking the arbitration clause of the standard Wells Fargo bank account contract, as follows:

You and Wells Fargo Financial National Bank (the “Bank”), including the Bank’s assignees, agents, employees, officers, directors, shareholders, parent companies, subsidiaries, affiliates, predecessors and successors, agree that if a Dispute (as defined below) arises between you and the Bank, upon demand by either you or the Bank, the Dispute shall be resolved by the following arbitration process. However, the Bank shall not initiate an arbitration to collect a consumer debt, but reserves the right to arbitrate all other disputes with its consumer customers. A “Dispute” is any unresolved disagreement between you and the Bank. It includes any disagreement relating in any way to your Credit Card Account (“Account”) or related services. It includes claims based on broken promises or contracts, torts, or other wrongful actions. It also includes statutory, common law and equitable claims. A Dispute also includes any disagreements about the meaning or application of this Arbitration Agreement. This Arbitration Agreement shall survive the payment or closure of your Account. You understand and agree that you and the Bank are waiving the right to a jury trial or trial before a judge in a public court. As the sole exception to this Arbitration Agreement, you and the Bank retain the right to pursue in small claims court any Dispute that is within that court’s jurisdiction. If either you or the Bank fails to submit to binding arbitration following lawful demand, the party so failing bears all costs and expenses incurred by the other in compelling arbitration.

Many consumers and lawyers have fought the use of this provision.  They argue that it unfair due to the cost, privacy, the possible bias of arbitrators and, most importantly, the inability to bring a class action lawsuit (which allows one case to be brought by many consumers who have similar claims).  Instead, the arbitration cases must be brought against the bank one at a time.  Wells argues that the parties agreed to these terms when the accounts were opened. However, lawyers have argued that since the fake accounts were never agreed to by the consumer, the terms of the standard contract they signed to open prior, legitimate accounts, does not apply.  So far Wells has been successful in moving lawsuits to arbitration.  Eventually the issue may be decided by an appellate court, but for now, consumers need to be aware of these clauses in their dealings with large corporations.

While arbitration is generally binding on the parties, mediation is another method of resolving disputes prior to court or trial.  Mediation is non-binding, which means that the mediator cannot rule on the case, and if the parties do not agree to a settlement, the matter continues to litigation.  Mediation either occurs through contract, a pre-suit statutory requirement, or by court order (which occurs in almost all civil cases today).

For example, in the most common real estate contract used in South Florida, all disputes under the contract must be settled by mediation prior to any lawsuit being instituted:

Buyer and Seller shall attempt to settle Disputes in an amicable manner through mediation pursuant to Florida Rules for Certified and Court-Appointed Mediators and Chapter 44, F.S., as amended (the "Mediation Rules").  The mediator must be certified or must have experience in the real estate industry. Injunctive relief may be sought without first complying with this Paragraph 16(b). Disputes not settled pursuant to this Paragraph 16 may be resolved by instituting action in the appropriate court having jurisdiction of the matter

In Homeowner Association disputes, matters may be resolved by either pre-suit mediation or binding arbitration, depending on the nature of the dispute.  Disputes regarding condominium associations can be subject to mandatory nonbinding arbitration depending on the nature of the claim.  This special type of arbitration results in a final decision of the arbitrator, but is subject to all regular appellate rules, making the ability to appeal the arbitration decision no different than a decision by a trial court.

In and of itself, arbitration, as a method to resolve disputes, is not better or worse than court.  It is often faster and cheaper than litigation, and many people prefer the privacy that a public trial does not provide.  It also offers more finality, as the grounds for a trial court appeal do not apply, though under certain limited circumstances, the arbitration decision can be appealed. 


Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.  They can be reached at 561.594.1452, or at mjposner@warddamon.com